Posts Tagged ‘World Auto Reports’

Toyota officially confirmed late today that is suspending production once again at two U.S. plants to trim growing inventory levels because of slow sales.

Press reports earlier today coming out of Japan claimed that Toyota was preparing to shut plants in the U.S. once again due to a continuing slump in sales. Toyota in the U.S. did not respond to requests from TheDetroitBureau.com at that time for clarification.

This latest hiatus follows the shut down by Toyota – at the insistence of the National Highway Traffic Safety Administration — of six North American plants for one week in January. The production halt then was in conjunction with a stop sale following the recall of 2.3 million Toyota vehicles for sticking gas pedals leading to unintended acceleration on at least eight models.

NHTSA, itself under attack for its lack of action in unintended acceleration or gas pedal entrapment issues at Toyota, now has reports of 37 deaths, which allegedly were caused by Toyota safety defects. (more…)

Ford Motor Company announced a “Go Green” dealership sustainability program with its U.S. Ford and Lincoln Mercury dealers at the 2010 National Automobile Dealers Association Convention.

The goal of the program is to help dealers implement cost-effective ways to improve the energy-efficiency of their facilities, resulting, Ford hopes, in a long-term reduction in an individual dealership’s carbon footprint, as well as overall operating costs.

Dealers will be able to take advantage of several benefits, including help on available State and Federal tax credits and incentives, as well as access to technical expertise and resources to assist with selection of energy-efficient products and equipment.

Ford is finalizing details of a pilot program with three dealers located in Florida, New York and Nevada, but was unable to provide any more information as to what was being proposed, how tax credits come in play, and what energy savings actually are targeted.

Ford Motor currently has 3,553 Ford and Lincoln Mercury brand dealers; and programs like this could make a difference. Jarrett Gordon Ford in Winter Haven, Florida is furthest along in starting the pilot.

Your dollars are in his hands. If he cleans up the mess, taxpayers will be paid back.

GMAC reported this morning a record Quarter 4 loss of $3.9 billion from ongoing operations, compared with a profit of $7.5 billion a year earlier.

A net loss of $5.0 billion bought the total full-year net loss to $10.3 billion, compared to net income of $1.9 billion in 2008.

Results for the 2009 fourth quarter and full year were largely affected by losses related to GMAC’s reckless lending practices in its mortgage operations.

“Key steps during the year included: diversifying the profitable automotive finance business with the addition of Chrysler; launching the Ally Bank brand, which is a key part of our funding profile; strengthening our capital and liquidity positions; and implementing major restructuring actions to minimize risk related to the legacy mortgage business,” said GMAC Chief Executive Officer Michael A. Carpenter.

The U.S. Department of the Treasury last December provided an additional $3.8 billion in capital from taxpayers to GMAC to keep it solvent, in addition to almost $14 billion previously forwarded.

Treasury under its financial health check assessment, the so-called Supervisory Capital Assessment Program (SCAP), said that additional capital was needed for tottering GMAC, which was suffering from bad loans and collapsed residual values for leases of General Motors vehicles, as well as failed loans in the real estate markets.

As part of the additional funds, Treasury restructured its investment in GMAC “to protect taxpayers and put GMAC in a position to raise private capital and pay back taxpayers as soon as practicable.” As a result, U.S. taxpayers now own 56% of GMAC’s common equity, and $2.7 billion in 8% coupon trust preferred securities, and $11.4 billion in 9% coupon mandatory convertible preferred stock. Taxpayer ownership could increase to 70%, according to GMAC.

Taxpayers are clearly at risk here, given their already large 50% holding of General Motors Company, which lost $1.2 billion in its latest quarter.

Follow Your Money!

The Obama Administration, facing unanimous Republican opposition, has thus far been unable to implement any reforms whatsoever in financial regulation 16 months after the collapse of the Lehman Brothers and AIG, among others, in the fall of 2008. (more…)

CTS Corporation (NYSE: CTS) said this afternoon that the pedals it supplied to Toyota met its design specifications. The company made at least some of the pedals involved in the recall.

“Based on information that Toyota has provided us, we are aware of fewer than a dozen instances where this condition has occurred, and in no instance did the accelerator actually become stuck in a partially depressed condition,” CTS said in a carefully worded statement.

The assertion comes as Toyota Motor Corporation considers expanding its pedal recall from the North America to other global markets.

Toyota’s credibility about its assertions of the causes of runaway or unintended acceleration accidents has been damaged by recent events. Although the company continually said that it was caused by a floor mat interference problem, at least one accident, involving multiple fatalities, has been reported where the floor mats were removed from the car and locked in the trunk when the deaths occurred.

The company announced yesterday that it would stop sales of about 60% of its vehicles (by volume) in North America while it searches for a root cause.

Toyota Motor Sales (TMS), U.S.A., Inc, a TMC subsidiary, announced last week it would recall approximately 2.3 million vehicles to correct sticking accelerator pedals on eight Toyota Division models.

This action is separate – thus far — from the on-going recall of approximately 4.2 million Toyota and Lexus vehicles to reduce the risk of “pedal entrapment” by incorrect or out of place accessory floor mats. Approximately 1.7 million Toyota Division vehicles are subject to both recall actions. (more…)

Toyota Motor Corporation is in discussions with other governments or safety agencies about potential actions similar to the ones undertaken in the U.S. to correct defects in accelerator pedals, according to people close to the situation.

If a sales halt and plant shut downsoccur in other regions, like the ones announced yesterday covering North America, it will make it harder for the world’s largest automaker to return to profitability.

It was not immediately clear if the modifications will affect only left-hand-drive models used in Europe, Africa and China, or include Asian right-hand-drive models.

Toyota has thus far not revealed the root cause of the problem, and previous assertions that acceleration issues was solely a floor mat issue in the U.S. have proved false.

There is a strong economic incentive at auto companies to try to limit the number of vehicles covered by a recall. In the Toyota pedal matter, expensive mechanical, computer and software fixes are required.

Either way, millions upon millions more cars, pickup trucks and SUVs potentially will require repairs, with unknown effects on Toyota’s new vehicle sales, owner loyalty and reputation.

Toyota is predicting a sales increase to 8.27 million units globally for this calendar year, up 6% from, 7.81 million in 2009, which represented a 13% decline from 2008.

In North American, 2.3 million vehicles are — thus far — covered for sticking accelerator pedals in the latest recall that was announced on Monday by Toyota Motor Sales, a subsidiary of TMC. Included in the recall is the Corolla model, the best selling nameplate in the world.

Stay Informed!

It is also not clear, if there is a sizable population of vehicles outside of North America with a separate or perhaps related problem with runaway acceleration. In North America, 4.2 million vehicles are impacted by a a previous floor mat recall.

The booming Chinese market will grow to 19 million units of annual sales by 2016, according to the experts from the global auto consultancy practice at PricewaterhouseCoopers.

That would make China the largest maker and consumer of vehicles in the more than 100-year history of the business.

Moreover, you ain’t seen nothin’ yet, at least according to some speculation by me and other sources.

If these pro-Chinese factions are right, the home market could reach 30 million units by 2020 or so, and barring a political upheaval – a genuine risk that virtually everybody acknowledges– it could grow to 40 million units by the end of that decade. Who knows?

This means that Chinese makers will be hard pressed to keep up with internal demand and most Chinese cars — except for maybe the odd few Geely or Chery models — will not be exported. Actually, given their current quality, I argue that it would be better for established automakers if the Chinese did export large numbers of vehicles right now. Remember the Korean-built Hyundai Excel of the 1980s? It was so bad, except for the eastern European Yugo, that it set back Hyundai marketing in the U.S. for decades.

Many of the assumptions made about China are wrong, such as a coming Chinese export wave that enthralls media types and the opining classes, cautions Steve D’Arcy, a partner in PWC’s Global Automotive Practice.

中国头号!

There will be no massive wave of exports emerging out of China because Chinese makers will barely be able to keep up with burgeoning demand. Hence the 19 million prediction for 2016. As Chinese annual income levels keep rising to equal an average vehicle price of 38,000 RMB or ~$5,600 for a basic car, D’Arcy sees now reason why China won’t remain the world’s largest auto market, he theorized at press luncheon in Detroit today.